Opinion in Børsen: Have we created a system that pushes companies into economic crime?

When the price gets so low that the calculation no longer adds up

One of the central questions in the opinion piece is what happens when companies are pressured to deliver services at prices where there is realistically no room for wages, tax, VAT and other operating costs.

An example is the transport industry, where an independent haulier may be paid per parcel delivered, while the haulier must also bear expenses including vehicle, fuel, insurance, sickness and wages.

If the payment is set so low that the business cannot be run on ordinary market terms, pressure arises.

This does not, of course, absolve the individual company or business owner of responsibility if the rules are broken. But it raises the question of whether responsibility is always placed in the right places.

Who actually benefits?

When tax and VAT fraud is committed, the loser in the end is society.

But the financial gain does not necessarily end up with the smaller subcontractor who is later met with a tax claim or criminal proceedings.

Large companies can also benefit from very low subcontractor prices and thereby offer their own customers goods and services more cheaply.

This was one of the main messages in the opinion piece: there should also be focus on the companies and structures that make it possible to push prices down to a level where the question naturally arises whether the service can even be delivered lawfully.

Public procurement and unnaturally low prices

The issue also arises in public procurement.

If, for example, four companies offer a service at around DKK 250-275 per hour, while a fifth offers the same service at DKK 120 per hour, the large price difference should give cause for questions.

How can the company pay wages, holiday pay, tax, VAT and other costs and still run a profitable business?

If unnaturally low bids are accepted without closer scrutiny, it risks creating competition where companies that comply with the rules are placed worse than companies that do not.

Chain fraud also affects companies that have not committed fraud themselves

The issue remains relevant in tax and VAT cases concerning so-called chain fraud.

We see cases where the Tax Agency raises questions about a company's VAT deduction or deduction for subcontractors because irregularities have been identified further down the supplier chain.

In such cases, a central question is often what the specific company knew or ought to have known about the circumstances at its suppliers.

It is not necessarily sufficient that fraud can be established at another company in the chain. A concrete assessment must be made of the individual company's role, actions and knowledge.

Tax control must also ensure fair competition

Combating economic crime is necessary. Tax and VAT fraud harms both the public purse and the companies that operate within the rules.

But in our view, control should not focus solely on the company at the bottom of a long supplier chain.

If the aim is to effectively combat social dumping, chain fraud and systematic economic crime, it is also necessary to look at the commercial structures, price pressure and the companies that ultimately benefit financially from very low prices.

Otherwise, there is a risk of treating the symptom without addressing the cause.